Home sales have fallen to their lowest level in 16 years, with existing home sales dropping to 3.75 million in October, an 8.8% decline from a year earlier, according to the National Association of Realtors (NAR), as reported by NPR.
“It was a punch in the gut,” said Joel Berner, senior economist at Realtor.com. “We expected to see a soft month but not the softest month since 2010.”
The report attributed the decline to high mortgage rates. In October, the average rate for a 30-year fixed-rate mortgage reached 7.40%, its highest level since 2023. Rates have declined since then but remain well above where they were a year ago. Rising inflation and bond yields have pushed mortgage rates higher, although some of the housing slowdown was an intended consequence of the Federal Reserve’s monetary policy.
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The Federal Reserve raised its benchmark interest rate in September to increase borrowing costs, including those for home mortgages. Higher borrowing costs tend to discourage home purchases and other spending, reducing economic activity. The Fed seeks to moderate demand as part of its efforts to bring inflation under control.
“It might seem like kicking the housing market while it’s down right now for the Fed to continue a rate raising cycle but in the long run getting inflation under control is really the goal,” Berner said.
Mortgage rates had been steadily declining through 2024 and 2025, with the 30-year rate falling below 6% for the first time in February 2026. However, rates subsequently climbed amid rising inflation and higher bond yields linked to the Iran war.
“Home buying is difficult when mortgage rates have climbed to their highest levels since 2000, aside from a single month in 2023,” said Lawrence Yun, chief economist at the NAR. “As a result, home sales fell to their lowest level since August 2010.”
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Existing home sales declined in the South, Midwest and West, while remaining unchanged in the Northeast.
Housing inventory increased 1.3% to 1.59 million units in October, up 4.6% from a year earlier. At the current sales pace, it would take 5.1 months to sell the existing inventory, the highest level since November 2015. That compares with 4.7 months in September and 4.4 months a year earlier.
The median existing-home price rose 0.4% from a year earlier to $421,900 in October, the highest median price recorded for the month.